Government green light hoped for as new partners prepare to come on-board Inpex-led project
Japan’s Inpex is hoping Indonesian authorities will soon approve its latest development plan for the Abadi liquefied natural gas project that has long languished on the drawing board.
Inpex on 3 July 2023 confirmed that in April it had submitted an updated version of the revised plan of development for Abadi, the giant gas field discovered more than two decades ago on the remote offshore Masela production sharing contract in the Arafura Sea, near to Indonesia’s maritime border with Australia.
Against this backdrop, supermajor Shell — currently Inpex’s sole partner for Abadi — is in advanced negotiations to divest its 35% equity to a partnership of Indonesia’s national oil company Pertamina and its Malaysian counterpart Petronas.
For at least eight months, Indonesian government agency officials have been firmly putting Petronas in the frame, although the company has not commented on any such move.
In contrast, a senior Pertamina official last September confirmed to Upstream that the Indonesian company was preparing to bid for a stake in Abadi, which has been designated a project of national strategic importance.
Shell has been trying to divest its Abadi interest since before the Covid-19 pandemic, with industry sources in 2019 suggesting a price tag in the $1.6 billion ballpark.
The Abadi PoD now under consideration involves a floating production, storage and offloading vessel to be deployed on the giant offshore gas condensate field, with produced gas being utilised as feedstock at a two-train 9.5 million tonnes per annum greenfield onshore LNG project.
It is envisaged that Abadi will also deliver 150 million cubic feet per day of natural gas via pipeline to domestic customers in the east of the Indonesian archipelago.
The Abadi field was discovered in 2000 on the Masela PSC, which has been extended until November 2055.
Appraisal drilling subsequent to the successful Abadi-1 wildcat has resulted in recoverable reserves being pegged at more than 10 trillion cubic feet of gas.
Production rates of 1.8 billion cubic feet per day of gas plus up to about 35,000 barrels per day of condensate have been touted via the proposed FPSO.
Inpex’s latest development plan includes a carbon capture and storage (CCS) scheme that would neutralise all carbon dioxide emitted from gas production at Abadi.
“Detailed survey work in the planned construction site for the LNG plant and its surrounding areas had been under way until it was suspended due to the impact of the Covid-19 pandemic,” Inpex added.
“Subsequently, considering the need to contribute to a net-zero carbon society and aspiring to make the project cleaner and more competitive amid energy transition, we have been consulting with the Indonesian authorities on a revised development plan introducing CCS.”